Focus on the Big Picture
Not the Numbers
Chapter 4
Jayson Davidson, Sienna Rucker, Jordan
Myers, Phoenix Delcueto, Nick Thomas
Fluor Video
http://www.fluor.com/about_fluor/Pages/videos.aspx?channel=4&videoid=422
Topics
Focusing on the big picture
Drawing your strategy canvas
Visualizing strategy
Overcoming the limitations of strategic planning
Focus on the Big Picture
Not the numbers
Build your strategy around the
canvas
Four steps of Visualizing Strategy
1. Visual Awakening
2. Visual Exploration
3. Visual Strategy Fair
4.Visual Communication
Step 1: Visual Awakening
Draw strategy canvas “as is”
Determine weaknesses
Change strategy
Step Two: Visual Exploration
• Send a team into the field
• Do not outsource
• “How people use or don’t use their products or services.”
• Customers
• Noncustomers
• Users
• Complementary products
Step Two: Visual Exploration
• EFS sent managers out for visual exploration
• Four weeks in the field
• Interview & observe ten people
• Lost customers
• New customers
• Customers of competitors
• Customers of alternatives
• Companies that may need services in the future
Step Two: Visual Exploration
• Many of their conclusions were overturned
• Key to success
Achilles heel
• EFS teams sent back to the drawing board
• Six new value curves with a different strategy
• Compelling tagline
• Competition between groups
How does this relate to Fluor?
• Send out managers to interview & observe sectors
• Customers & noncustomers
• Alternatives & complements
• Outside the industry’s typical boundaries
• Conclusions overturned?
• Back to the drawing board
• Break boundaries!
Step 3: Visual Strategy Fair
•After two week of drawing and redrawing, the teams presented their
strategy canvases at the Visual Strategy Fair.
•6 online, 6 offline groups
•No more than 10 minute presentations
•Judges given 5 sticky notes to vote
•After notes were posted, judges explained why they chose their
value curves
Take Away
•1/3 of what they thought were key competitive factors were marginal
to customers
•1/3 were not articulated in the visual awakening phase.
•Thus executives needed to reassess some long-held assumptions
•Buyers from all market have a basic set of needs and expected similar
services. When these needs are met, customers forgo everything else.
EFS’s Future strategy &
Eliminate-Reduce-Raise-Create Grid
EFS’s Future strategy
•Eliminated Relationship Management
•Reduced investment in Account Executives and Corporate Dealers
•Future strategy emphasized:
•Ease of use
•Security
•Accuracy
•Speed
•Create Confirmation and Tracking
Fluor- Change Management
Eliminate
Relationship Mgmt.
Raise
Ease of Use
Security
Accuracy
Speed
Market Commentary
Reduce
Account Executives
Corporate Dealers
Create
Authorization
Collaboration
EFS’s Future strategy
•Eliminated Relationship Management
•Reduced investment in Account Executives and Corporate Dealers
•Future strategy emphasized:
•Ease of use
•Security
•Accuracy
•Speed
•Create Authorization and Collaboration
Step 4: Visual Communication
• Distribute before and after
strategic profiles for easy
comparison
• Support only projects for the
new strategy
Step 4: Visual Communication (cont.)
• Senior Managers Explanation
• Employees Motivated by
constantly visualized plan
• Example: IT & regional
departments
Visualizing Strategy at the Corporate Level
• Visualizing strategy can improve the dialogue between individual
business units and the corporate center in transforming a company
from a red ocean to a blue ocean player.
Using the Strategy Canvas
• Unit heads present their canvases and implementation plans to one
another
• Poor performers felt that they had little choice but to match what their
competitors offerings.
• Value Innovation Program at Samsung
Pioneer-Migrator-Settler Map
• Visualizing strategy can also help managers responsible for corporate
strategy predict and plan the company’s future growth and profit.
• Companies who create blue oceans have been pioneers in their
industries, not necessarily in developing new technologies but in
pushing the value they offer customers to new frontiers
Pioneers
• Pioneers- businesses in a company that offer unprecedented value.
•
•
•
•
Blue ocean strategists
Most powerful sources of profitable growth
Mass following of customers
Value curve diverges from the competition on the strategy canvas
Settler
• Settlers- businesses in a company whose value curves conform to the
basic shape of the industry’s.
•
•
•
•
Me-too businesses
Will not generally contribute much to a company’s future growth
Stuck within a red ocean
If a company consists of mainly settlers it has a low growth trajectory and
needs to push for value innovation
• May be profitable today but will fall into the trap of competitive
benchmarking, imitation, and intense price competition
Migrator
• Migrators- businesses in a company that fall in between pioneers and
settlers.
• Extend the industry’s curve by giving customers more for less, but they don’t
alter its basic shape
• Offer improved value, but not innovative value
• Strategies fall on the margin between red and blue oceans
Pioneer-Migrator-Settler Map
• Valuable for managers who want to see beyond today’s performance
• Revenue, profitability, market share, and customer satisfaction are all
measures of company’s current position.
•
These measures cannot point the way to the future; changes in the
environment are too rapid
Pioneer-Migrator-Settler Map
• Value and Innovation are the important parameters for managing
their portfolio of businesses
• Use innovation because without it companies are stuck in the trap of
competitive improvements
• Use value because innovative ideas will be profitable only if they are
linked to what customers are willing to pay for
Pioneer-Migrator-Settler Map
• Organizations should generally shift the balance of their future
portfolio towards pioneers
• Management must be aware that even though settlers have marginal
growth potential they are today’s cash generators.
• Pioneers have maximum growth potential but often consume cash as
they grow and expand
Pioneer-Migrator-Settler Map
Pioneers
Migrators
Settlers
Today
Tomorrow
Fluor Pioneer-Migrator-Settler Map
Pioneers
Migrators
Settlers
Today
Tomorrow
Overcoming Limitations of Strategic Planning
• Managers discontent with the core activity of strategy--strategic
planning
• View strategic planning as collective wisdom than top-down or
bottom-up planning.
• Managers view strategic planning conversational than solely
documentation-driven (building the big picture vs numbercrunching exercises).
Overcoming Limitations of Strategic Planning (cont.)
• Include creative component vs. only
analysis-driven.
• Focus on motivation & invoke
commitment vs bargain-driven &
negotiated commitment.
• No viable alternative to existing
strategic planning--most essential
management task
Overcoming Limitations of Strategic Planning (cont.)
• Build process around manager’s
discontents with existing strategic
planning yields better results.
• Strategic planning larger than
Strategy Canvas & PioneerMigrator-Settler maps
• Details will fall into place if
managers start with the big
picture
Overcoming Limitations of Strategic Planning (cont.)
• Fluor Example
• Power Plant
• Type vs. Region
• Scalable vs Specific
Resources
• http://csimarket.com/stocks/compet_glance.php?code=FLR
•
http://www.fluor.com/about_fluor/Pages/videos.aspx
Questions?